Markets flat as growth in China slows

Weak earnings reported in U.S., around the globe as double-digit rates drop

Associated Press

Published 6:53 pm, Monday, January 20, 2014

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ZHENGZHOU, CHINA - JANUARY 20: (CHINA OUT) People walk past a copper coin-shapped decoration for Chinese New Year on January 20, 2014 in Zhengzhou, China. China's economy expanded 7.7 percent year-on-year in 2013, according to the National Bureau of Statistics on Monday. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images) ORG XMIT: 464361221 less

ZHENGZHOU, CHINA - JANUARY 20: (CHINA OUT) People walk past a copper coin-shapped decoration for Chinese New Year on January 20, 2014 in Zhengzhou, China. China's economy expanded 7.7 percent year-on-year in ... more

Photo: ChinaFotoPress

Markets flat as growth in China slows

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Kuala Lumpur, Malaysia

World markets were lackluster Monday amid concerns about slowing economic growth in China and more poor earnings from banks. Wall Street was closed for a holiday.

Official figures on showed China's economy grew 7.7 percent in the quarter through December, down from 7.8 percent the previous quarter. For the full year, the economy expanded 7.7 percent, tying 2012 for the weakest performance since the 1990s.

China's growth is far stronger than the United States, Japan or Europe. But an unexpectedly abrupt decline from the double-digit rates of the previous decade has complicated the ruling Communist Party's plans to promote more sustainable growth based on domestic consumption and reduce reliance on trade and investment.

"The 'boom' is ending, but sustained demand is just as important," said Evan Lucas, market strategist with IG in Melbourne, Australia.

Germany's DAX dropped 0.3 percent to 9,715.90, led by a 5.4 percent fall in Deutsche Bank, which said it would book an unexpected loss in the fourth quarter. The report caused shares in financial companies across Europe to underperform the wider market. It follows weaker earnings at major U.S. banks such as Morgan Stanley and Goldman Sachs.

Analysts said the U.S. corporate reporting season will be in focus when Wall Street reopens Tuesday after some disappointing earnings so far. Markets will also be cautious ahead of the Federal Reserve's next meeting Jan 29.

In other markets, benchmark crude for February delivery was down 28 cents at $93.68 in electronic trading on the New York Mercantile Exchange. The contract rose 41 cents on Friday.

The euro rose 0.2 percent to $1.3558 while the dollar fell 0.1 percent against the Japanese yen, to 104.14 yen.